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Edelweiss Technical Reflection (ETR)
§ Nifty opened the week on a subdued note and slipped down from the intraday high of 6335. Nifty has now closed below the 6300 mark which will be difficult to regain in the immediate short-term. The index has broken below a steep upward rising channel and is expected to retrace the rally of last week from 5937 to 6338. The momentum oscillators have triggered a sell on the hourly chart indicating a corrective move. The daily oscillators however remain bullish. Market wide breadth was marginally in favor of declines. Nifty stocks’ breadth was neutral at 1:1.5. Nifty is expected to take a pause in its pursuit of surpassing the all-time high level of 6357 and scaling to the 6500 mark. A decline towards the hourly supports of 6245 and 6185 is possible where buying is likely to emerge. It is advisable to position for a buy on declines strategy for stocks in an uptrend as well as on the index.
§ IT, Telecom and PSU stocks were the main contributors to the market loss in yesterday’s session. Healthcare, Realty and Metals held on to the gains throughout the day. A smart move was seen in the cyclicals like Cement and Sugar stocks where the bullish rally is expected to extend for further 10-12% gains. Bullish Setups: ESOIL, TATA, LT, CHMB, HNDL, ICEM. Bearish Setups: HPCL, DABUR, INFY.
§ Global markets are taking a breather after the tear away rally since last week. The indices are holding on to short-term supports providing good entry points on the long side. Gold is expected to break past the $1400 mark with ease for a short-term rally towards $1435. DXY is building on short-term gains, but moving average resistance at 77.30 is likely to offer challenge to the move. Going forward, moves in currencies are likely to get choppy and game changers for few asset classes like commodities.
§ Interesting chart setups: TATA, LT, ITC, ICEM, HPCL, DABUR
Sales Traders Commentary
§ Key benchmark indices started the week on a subdued note; weak European stocks and lower US index futures also weighed on investor sentiment. While IT, banking and consumer durables stocks fell, metal , sugar and cement stocks surged.
§ The Sensex closed at 20850, up 155 points, and the Nifty closed at 6273, up 40 points.
§ Gainers were Sterlite Industries (India) (3.00%), ACC (2.43%), Tata Motors (2.24%), Tata Steel (1.97%), Hindustan Unilever (1.47%), and Hindalco Industries (1.38%).
§ Losers were Oil & Natural Gas Corporation (1.90%), Infosys Technologies (1.55%), Maruti Suzuki India (1.51%), Reliance Communications (1.40%), Mahindra & Mahindra (1.35%), and Hero Honda Motors (1.34%).
§ The IT index was down 1.38%. Major losers were Mphasis (2.87%), Infosys Technologies (1.55%), Oracle Financial Services Software (1.46%), H C L Technologies (1.23%), and Patni Computer Systems (1.11%).
§ The Telecom index was down 1.15%. Major losers were Idea (0.50%) and Bharti Airtel (0.11%).
§ The Metal index was up 1.08%. Major gainers were Sterlite Industries (India) (3%), Jindal Saw (1.8%), Sesa Goa (1.59%), Hindalco Industries (1.38%) and Jindal Steel & Power (0.5%).
§ Globally, while Asian indices ended on a mixed note, Europe was trading flat.
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